Insider Buying: The Purplebricks Group plc (LON:PURP) Senior Independent Director Just Bought 112% More Shares
Investors who take an interest in Purplebricks Group plc (LON:PURP) should definitely note that the Senior Independent Director, Simon Downing, recently paid UK£0.16 per share to buy UK£163k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 112%.
View our latest analysis for Purplebricks Group
The Last 12 Months Of Insider Transactions At Purplebricks Group
Notably, that recent purchase by Senior Independent Director Simon Downing was not the only time they bought Purplebricks Group shares this year. Earlier in the year, they paid UK£0.97 per share in a UK£251k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.22). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Simon Downing.
Simon Downing purchased 1.26m shares over the year. The average price per share was UK£0.33. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£2.6m worth of Purplebricks Group stock, about 3.9% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Purplebricks Group Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Purplebricks Group insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Purplebricks Group. In terms of investment risks, we've identified 3 warning signs with Purplebricks Group and understanding them should be part of your investment process.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
